For the quarter, the turmoil in the Indian industry affected ATC’s total quarterly property revenue by $89 million, while impact on adjusted Ebitda was $61 million, that on consolidated Consolidated Adjusted Funds From Operations (AFFO) was $49 million and on tenant billings was $67 million.ETTelecom | May 03, 2019, 19:00 IST

NEW DELHI: American Tower Corp. (ATC) has said that its first quarter results and its outlook for 2019 have been hurt by the fall in tenancies due to the stiff competition-induced rapid consolidation in the Indian telecomindustry which has more-than halved the number of operators to three in just over two years.

“Certain wireless carriers in India are in the process of, or have recently concluded, merging their operations or exiting the marketplace. The Company’s operational and financial results during the first quarter of 2019 were impacted by churn driven by this carrier consolidation process,” ATC said in its earnings statement for the January-March quarter.

For the quarter, the turmoil in the Indian industry affected ATC’s total quarterly property revenue by $89 million, while impact on adjusted Ebitda was $61 million, that on consolidated Consolidated Adjusted Funds From Operations (AFFO) was $49 million and on tenant billings was $67 million.

The company’s first quarter net income was $408 million, up 45% on year, on total revenue of $1,813 million, a rise of 4.1%. Total property revenue was $1786 million, 4.4% while adjusted Ebitda rose 4.9% to $1114 million.

“The expected 2019-specific impacts of ICCC (churn in India) to property revenue, Adjusted EBITDA and Consolidated AFFO are $191 million, $148 million and $118 million, respectively, including $22 million in lower pass-through revenue,” the company said.

It expects the negative impact consolidation in India to last throughout 2019 and anticipates that churn rates in India will return to lower levels in 2020 and beyond. Bharti Infratel, India’s only listed tower company, recently also reported flat net profit and lower revenue hurt by a sharp drop in co-locations on its telecom sites amid rapid consolidation in India’s telecom sector.

ATC is now among the three largest telecom tower firms in the country with a base of some 80,000 towers.

The company said it has agreed to acquire Tata Teleservices’ near 13% residual stake in ATC Telecom Infrastructure Pvt Ltd for roughly Rs 2,480 crore (about $359 million) in what sources say will be an all-cash deal. ATC expects to complete the deal in 2019.

“After the completion of the redemption, the company (ATC) will hold an approximately 92% ownership interest in ATC TIPL,” ATC said. Macquarie-controlled funds are reckoned to own the balance stake.

The deal — at roughly Rs 212 per share — marks the exit of Tata Group from the consumer mobility and related businesses.

The group is in the final stages of selling Tata Teleservices’ consumer mobility business to Bharti Airtel.

ATC had in October last year bought nearly half of Tata Tele’s original 26% stake in ATC Telecom Infra along with IDFC’s 2% for a total consideration of Rs 2,940 crore, minus the $320 million penalty Tata Tele for prematurely winding up of some 30,000 tenancies.

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